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Council moves to reinstate municipal grocery occupation tax amid uncertain revenue impact
Summary
The council voted Aug. 18 to adopt an ordinance to implement the municipal grocery occupation tax that the state had previously collected; staff said the local impact will likely be small because the community lacks a full grocery store and much food sales are recorded at gas pumps.
South Lloyd — The council on Aug. 18 approved an ordinance to implement the municipal grocery occupation tax previously collected at the state level and now available for municipalities to adopt.
Staff explained that the tax is not new to the local tax base but was administered by the state until Governor J.B. Pritzker’s change in state collections. If the city does not adopt the tax locally, staff warned, a gap in revenue could begin Jan. 1. The council voted to reinstate the tax under local authority to avoid a shortfall.
Staff said estimating the revenue impact is difficult from Department of Revenue data because sales codes do not cleanly separate grocery sales from convenience‑store gas‑pump purchases. One staff estimate placed the grocery‑coded sales at roughly $37,000 per quarter in sales‑tax equivalent receipts for the city; staff noted that nearby municipalities with full grocery stores show substantially larger quarterly amounts. Because much of the local “grocery” activity occurs at gas stations and convenience stores, staff said the direct impact on city residents should be modest.
“It’s absolutely not a new tax,” a staff member said. “If we don’t reinstate the tax that are already existed, we will start to see a gap in that, that tax coming in starting on January 1.” The council then moved and voted to adopt the ordinance; roll‑call votes were recorded in the meeting minutes.
